SUBCONTRACTOR BILLING DISCIPLINE SYSTEM, HOW TO BUILD IT.
When the system is in place, billing stops being a monthly conversation about whether the pay apps went out on time and becomes a monthly confirmation that they did. The cash flow improvement is permanent rather than a one time collection event. We install billing discipline in the first 30 days of every engagement. Most clients recover $40,000 to $120,000 in the first billing cycle purely from pay apps going out on time instead of 10 to 15 days late.
The reason this one pays back so fast is that nothing has to change in the field. The work was already done and the money was already earned. You're only fixing the date the paperwork leaves the building. A pay app submitted on the 25th and the same pay app submitted on the 8th of the following month describe identical work, and one of them gets paid two weeks sooner every month from here on. That's why it goes in during the first 30 days of an engagement instead of waiting for the strategic conversation. It is published in full money with a calendar attached to it.
WHAT IT MEANS.
Billing discipline is a system rather than a habit: one fixed cut off date, a schedule of values that supports consistent monthly billing, a pay app review before submission, and a 30 day AR collections trigger that runs on its own.
Billing discipline requires schedule of values discipline upstream of it. A pay app is only as easy to produce as the SOV it gets built from, so a contract signed with one lump sum line or with line items nobody can measure guarantees a negotiation every single billing cycle. Fixing the SOV at contract execution is a 30 minute job that removes that negotiation from every month of the project.
WHY BILLING BECOMES A MONTHLY CRISIS.
There's no single cut off date, so the projects drift
Different dates for different GCs, and a general policy of billing when somebody gets to it. Without one date applied to every active project every month, the pay apps that are easy go out early and the pay apps that need work go out whenever. The projects that drift are always the same projects, and they're usually the biggest ones. The first month of a fixed date is uncomfortable because it forces discipline onto work that has been sliding for a year.
The SOV was never built for monthly billing
When the schedule of values is one lump sum or a set of line items nobody can measure, every billing cycle turns into a negotiation about what got completed and how much of it should be billed. That negotiation costs days, and the days come off the front of the payment cycle. A correctly structured SOV lets the PM update percent complete in 20 minutes on the 22nd and have the pay app ready for the 25th.
Nobody reviews the pay app before it leaves
A pay app submitted with bad math, a wrong completion percentage, or missing backup creates a dispute, and the dispute pushes payment past the 30 day cycle entirely. Three minutes of review per pay app prevents a 30 day delay. Most subcontractors don't have a review step at all, so the GC's accounts payable clerk becomes the quality control, and she isn't in a hurry.
Nothing triggers the collections call
An unpaid pay app sits until somebody notices cash is tight, which is usually 50 or 60 days in. By then the conversation is a favor you're asking rather than a term you're enforcing. Without an automatic trigger on the 31st day, collections happens at the speed of whoever remembers, and that's the slowest process in the company.
WHAT IT LOOKS LIKE IN DOLLARS.
Most clients recover $40,000 to $120,000 in the first billing cycle after the cut off date goes in, and none of it comes from new work. It comes from pay apps that were going out 10 to 15 days late now going out on the 25th. The 25th works for most commercial subcontractors because it gives 5 to 6 business days of buffer ahead of the GC's own month end cut off.
THE FOUR COMPONENTS THAT MAKE BILLING STOP BEING A CRISIS.
Every PM and bookkeeper knows the cut off date, the SOV update deadline on the 22nd, the review deadline on the 24th, and the submission deadline on the 25th. It doesn't get communicated once at project start. It gets posted, it recurs, and it's not negotiable. By month three nobody has to be reminded, because the bookkeeper knows what to produce and the PM knows when the schedule of values has to be current.
Before the first billing cycle, the schedule of values gets reviewed for clarity, measurability, and completeness. Line items that are hard to measure get restructured, and change order lines get set up before the first directed change instead of after it. That 30 minute review prevents every billing dispute that would otherwise follow for the life of the project.
One standard template for every pay app, plus a checklist of the required attachments by contract type. The bookkeeper works from the template and not from memory, so every pay app looks the same to every GC every month. Consistency is what makes a GC's accounts payable process treat your billing as routine instead of as something to review.
Every pay app submitted 30 days ago and still unpaid is on the collections call list on the 31st day. Not the 45th, and not when cash gets tight. The 31st day, every month, whether anybody feels like making the call or not.
A contractor who installs billing discipline in month one doesn't see the full benefit until month four. Month one, the pay apps go out on the 25th. Month two, the first on time payments come in. Month three, the AR aging is visibly cleaner than it was 90 days earlier. Month four, line of credit utilization is lower, the Monday AR review is shorter, and the owner stops being surprised by the bank balance.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
FREQUENTLY ASKED.
